CFPB Issues Request for Information on Remittance Rule: CFPB Requests Information to Address Potential Concerns Arising from Termination of Temporary ExemptionSullivan & Cromwell LLP - May 3, 2019
On April 25, 2019, the CFPB issued a Request for Information (RFI) on its remittance rule, which addresses protections for consumers sending international money transfers, also known as remittance transfers. These protections were established by Dodd-Frank, which added a new provision to the Electronic Fund Transfers Act (EFTA) for this purpose. The EFTA and the remittance rule require companies sending remittance transfers to disclose, among other things, the exchange rate at which the customer’s funds will be converted to another currency, applicable fees and taxes, and the amount that will be delivered to the recipient. Dodd-Frank included a temporary exemption from this requirement for insured depository institutions and credit unions that make transfers from their customer accounts if they are unable to know the amount of currency that will be made available to the recipient. This exemption expires, without possibility of extension, on July 21, 2020. The RFI requests information on several aspects of the remittance rule, with a view to determining the extent of disruption that will result from the expiration of this temporary exemption and identifying possible means of mitigating that disruption. The RFI also seeks information to support a determination whether to incorporate a small financial institution exception into the rule.